Knowledge Center

Tuesday, October 20, 2015

HMB's Marilyn Wethekam Quoted by Law360 on FCA Tax Fraud Claims Following Sprint Ruling

Waves of FCA Tax Fraud Claims Could Follow Sprint Ruling

Law360, October 20, 2015

By Matt Sharp

"A New York Court of Appeals ruling Tuesday that Sprint Nextel Corp. must face a groundbreaking $300 million False Claims Act tax fraud suit was a resounding win for Attorney General Eric T. Schneiderman and raises concerns among tax pros of a snowball effect of similar actions in other states.

Some states such as Illinois continue to see tax-related cases falling under their FCA statutes, while others have considered and shelved similar plans to New York. Still, these states could ultimately be emboldened by the result out of New York and any amount won in the dispute. That could create a tricky situation for state tax authorities, according to Marilyn A. Wethekam of Horwood Marcus & Berk Chtd

"It puts tax administrators in a very difficult position. Their policy decisions, their administrative decisions are put into someone's else's hands [but] it isn't their expertise," Wethekam said. "If this catches fire and more states amend their FCAs to specifically cover state taxes it's going to be a whole new world."

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